How two Columbia engineers hijacked mobile commerce in Latin America

In winter 2013, two Columbia engineers walked away from glittering opportunities in New York to start a new venture in Guatemala. After discovering shared interests in their second year, Javier Mata and Frank Pinto kept in touch as Javier later founded a vacation rentals startup and Frank developed software for a Techstars company.

Raised in Guatemala and El Salvador, Javier and Frank experienced the myriad infrastructure problems of emerging markets when returning home to visit family and friends. Finally, the co-founders resolved to leave New York and start a venture to address problems in Latin America. They first moved to Guatemala City, staying with Javier’s parents while Frank searched for an inexpensive apartment.

Frank Pinto and Javier Mata, Ayalo co-founders

At the time however, online classifieds were nonexistent. Javier explains:

“Frank was trying to find a place to live, but it was super hard to find anything using the Internet. There was very little information about apartments or household items for purchase. We couldn’t determine which products were available, from which stores, and at what prices. This was just absurd.”

After this experience, Javier and Frank decided to build an efficient online marketplace for consumers. At the end of 2013, the co-founders released the first version of Ayalo as a classifieds site for feature phones which allowed consumers to search for products and chat with sellers. However, while traffic increased steadily, the number of transactions rounded to zero. Javier shared these insights:

“We learned that in emerging markets, we needed to solve three issues for mobile buyers: 1) access to financing for large-ticket items, 2) warranties for durable goods, and 3) a sense of trust and confidence.”

To address these issues, Javier and Frank realized they needed products from local stores. The co-founders attempted partnership discussions with Walmart, but the retailer wouldn’t consent to a meeting until the Ayalo team proved they could deliver meaningful traffic. So the co-founders designed an inventive strategy during the holiday season: they initiated a guerrilla marketing campaign to hijack the most-expensive billboard in Guatemala City dressed in Santa Claus costumes and announced via the press they were “striking to help consumers recover Christmas time with loved ones.” Naturally, the solution to help consumers save time was Ayalo.

The next step was to drive transactions. Again the co-founders developed a creative strategy: they organized a contest to solicit mobile users to upload retail products to Ayalo. In return, the contest winner would receive a $250 cash prize. In a single week, mobile users uploaded 2,432 items to Ayalo, which represented an 1100% increase from the previous week. With this online inventory and real-time chat with retailers, Ayalo noted a 400% increase in transactions driven by organic search. This strategy generated $100,000 in revenue for Walmart and a retail partnership with Ayalo.

Three months later, Javier and Frank expanded operations to Mexico and its 45 million smartphone users. Ayalo is now active in two countries and delivering 50% month over month growth with positive unit economics. Next steps include expansion with small and medium-size businesses across verticals and countries in Latin America. As Javier states:

“Ayalo enables real-time chat between mobile consumers and offline stores. Our goal is to help one billion people in emerging markets have a better real-world buying experience.”

Thank you for sharing your story with us, Javier. We look forward to seeing you, Frank and the Ayalo team reach your goal of $1 million in monthly revenues next year!